Inside Report (4)

Its war with Iran is having an unexpected effect on Iraq. Since the start of the war five months ago, the nation has become progressively "deradicalized," say observers.

The reasons: (1) Iraq feels "stabbed in the back" by a Soviet friendship treaty with rival Syria; (2) it genuinely fears Soviet encroachment in the Persian Gulf; (3) its arms suppliers for the clash with Iran have been Western nations, and not the Soviets, with whom the Iraqis were assumed to be good friends.

"Iraq today is not what it was even six months ago," says one Western source. "It's much more moderate. Because of its war, it is looking for friends, not enemies."

Iraq, it is said, may even be more moderate toward Arab-Isra eli coexistence now.m